Zombie foreclosures: New Jersey ranks second in US
They are called, "zombie foreclosures" -- properties abandoned by the owner while the bank plays out the process. New Jersey is second in the nation behind Florida with this type of foreclosure, according to recent data.
"As bad as it is in New Jersey, actually Florida has it worse, with almost twice as many as New Jersey. But in New Jersey we see about 18,000 of these zombie foreclosures. And that's up statewide 109 percent from a year ago. And so it's still well below Florida, but climbing very quickly," according to RealtyTrac Vice President Darren Blomquist.
A, snapshot of zombie foreclosures by RealtyTrac shows they are up 133 percent in Atlantic City and 110 percent in the Trenton area from a year ago. Blomquist says New Jersey has the longest and most drawn-out foreclosure process in the country,
"What's happening in a lot of these areas in New Jersey, including Trenton, is that we're finally seeing the banks foreclose on some of these properties that got into trouble during the last housing crisis," he said. "And a high percentage of these properties that they are forclosing on are these 'zombies,' because the homeowner has long since moved on with their life."
According Blomquist, the high "zombie foreclosure" rate in Atlantic City is piling on to the troubled resort town's existing economic problems. The foreclosures that would arise from the recent casino closings and people getting laid off probably won't show up until later this year or even next year because it takes a long time in New Jersey for the foreclosure process to play out, he said.
"A lot of what we're seeing in Atlantic City even now is tied back to the previous crisis," Blomquist said.
He added that the foreclosures taking place in Trenton are more indicative of the trend throughout the state.
"Trenton is more of what is happening statewide in New Jersey, where when the last housing crisis hit back in 2006, 2007, 2008, a lot of foreclosures started coming through," he said. "But then the banks got into trouble because they were not properly documenting the foreclosures, and the courts in New Jersey really pushed back and said, hey, you gotta have your ducks in a row before you foreclose.'"
Blomquist said because of that, a lot of foreclosures were delayed in New Jersey from the housing crisis that took years.
"I talked to agents in New Jersey who are saying the average is three years, and our data shows that too, to foreclose, sometimes it can be more than that," he said.